2G, 3G and Beyond


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2G, 3G and Beyond

  1. 1. 2G, 3G and Beyond An Understanding of Technology and Services
  2. 2. Agenda <ul><li>Wireless Cellular Technology Overview </li></ul><ul><ul><li>2G, 3G and Beyond </li></ul></ul><ul><li>Market Segmentation </li></ul><ul><ul><li>Network Convergence </li></ul></ul><ul><li>Market Trends </li></ul><ul><ul><li>Services </li></ul></ul>
  3. 3. 2G: Technology Summary <ul><li>TDMA: Time Division Multiple Access </li></ul><ul><ul><li>Standardized in 1990 as IS-54 </li></ul></ul><ul><ul><li>Provides 3-6 times capacity increase over AMPS (1G) </li></ul></ul><ul><ul><li>Peak data rate of 14.4kpbs (can bundle up to 8 channels) </li></ul></ul><ul><ul><li>Introduced authentication and encryption for security </li></ul></ul><ul><li>GSM: Global System of Mobile communications </li></ul><ul><ul><li>Standardized in 1992, based on TMDA technology </li></ul></ul><ul><ul><li>Improved battery life over TDMA </li></ul></ul><ul><ul><li>GPRS peak data rates of 140 kbps; EDGE data rates of 180kbps </li></ul></ul><ul><li>CDMA: Code Division Multiple Access </li></ul><ul><ul><li>Standardized in 1993 as IS-95 </li></ul></ul><ul><ul><li>Provides 1.5-2 times capacity increase over TDMA </li></ul></ul><ul><ul><li>Peak data rate of 14.4kpbs (can bundle up to 8 channels) </li></ul></ul>
  4. 4. 2G: Winners & Losers <ul><li>TDMA </li></ul><ul><ul><li>Marginally better capacity than GSM, marginally worse battery life </li></ul></ul><ul><ul><li>No evolution path beyond 2G – DEAD END !! </li></ul></ul><ul><li>CDMA </li></ul><ul><ul><li>Lots of hype on capacity, delivered on upwards of 2x capacity improvement over TDMA/GSM </li></ul></ul><ul><ul><li>Clear evolution to 3G </li></ul></ul><ul><li>GSM </li></ul><ul><ul><li>International Roaming and Compatibility </li></ul></ul><ul><ul><li>Clear evolution to 3G </li></ul></ul><ul><ul><li>Defacto Global Standard </li></ul></ul>
  5. 5. GSM: A Success Story Growth in China GSM subscribers in Asia Pacific reached 650 million in March 2006 (521 million March 2005 = 24.7% annual growth) GSM growth exceeded CDMA by 11x from March 05 to March 06 China GSM grew over 54 mil subs in past 12 months = over 1 million/week Cdma added under 5 mil subs in the same period
  6. 6. GSM: A Success Story Growth in India India reached almost 64 million GSM subscribers at 31.03.06 GSM has 77.5% market share GSM additions = 22.7 million in 12 months = over 55% growth Cdma added 8 million in same period
  7. 7. GSM: A Success Story Growth in Rest of World Europe: Eastern Europe 289 million (48.9% annual growth) Western Europe 426 million (8.1% annual growth) Africa: 146 million (62.6% annual growth) Middle East: 51.4 million (63.5% annual growth) Americas: Canada and USA 85 million (35% annual growth) Latin America and the Caribbean 144 million (92.6% annual growth)
  8. 8. Evolution to 3G Drivers: Capacity, Data Speed, Cost cdmaOne GSM TDMA 2G PDC CDMA2000 1x First Step into 3G GPRS 90% 10% EDGE WCDMA 3G phase 1 Evolved 3G 3GPP Core Network CDMA2000 1x EV/DO HSDPA/HSUPA Expected market share EDGE Evolution CDMA2000 EV/DO Rev A
  9. 9. 3G: Technology Summary <ul><li>Technology Convergence on Wideband-CDMA </li></ul><ul><li>CDMA 2000 </li></ul><ul><ul><li>Successor to CDMA IS-95, 4 core standards – 1xRTT, 1x EV-DO, 1x EV-DV, 3xRTT </li></ul></ul><ul><ul><li>1xRTT provides 2x voice capacity increase over IS-95 and a peak data rate of 144kbps </li></ul></ul><ul><ul><li>EV-DO Rev A provide peak data rates of 3.1 downlink / 1.8 uplink (800kbps typical) </li></ul></ul><ul><li>UMTS </li></ul><ul><ul><li>Successor to GSM, based on W-CDMA </li></ul></ul><ul><ul><li>Peak data rates of up to 1920kbps (384kbps typical) </li></ul></ul><ul><ul><li>HSDPA peak data rate of up to 14.4Mbps </li></ul></ul>
  10. 10. 3G: Winners & Losers ?? <ul><li>UMTS </li></ul><ul><ul><li>Huge delays (terminals availability) </li></ul></ul><ul><ul><li>Exorbitant license fees </li></ul></ul><ul><ul><li>Confusing pricing strategies & lack of compelling services </li></ul></ul><ul><ul><li>Clear evolution path </li></ul></ul><ul><ul><ul><li>HSxPA (Peak Data Rates), LTE (Network Simplification) </li></ul></ul></ul><ul><li>CDMA2000 </li></ul><ul><ul><li>Early adoption (Korea) </li></ul></ul><ul><ul><li>Compelling peak data rates (EV-DO) </li></ul></ul><ul><ul><li>Unclear evolution path </li></ul></ul><ul><ul><ul><li>3xRTT? WIMAX? </li></ul></ul></ul>
  11. 11. UMTS Growth Devices Penetration Source: GSA survey published February 28, 2006 315 Devices 38 Suppliers
  12. 12. UMTS Growth Subscriber Penetration Over 55 million WCDMA subs at 31 March 06 Approaching 140% yearly growth Over 3 million adds monthly in last 6 months WCDMA gained over 10% share of mobile growth in Asia Q1 06 WCDMA gained 1 in 3 new connections in Western Europe in Q1 06
  13. 13. Global Subscriber Counts 0 0.5 Bn 1 Bn 1.5 Bn 2 Bn 2.5 Bn 2006 2007 2008 2009 2010 2011 CDMA GSM PHS W-CDMA Note: GSM Emerging Market Handset (EMH) initiative = 80% of Global Population with Wireless Service by 2010, based on sub $30 handsets 17 countries targeted = 1.8 Bn people ; not included in current sub counts
  14. 14. …and Beyond <ul><li>Technology Convergence on OFDM (Orthogonal Frequency Division Multiple Access) </li></ul><ul><li>WIMAX </li></ul><ul><ul><li>Standardized by IEEE 802.16, evolution of 802.11 (Wi-Fi) </li></ul></ul><ul><ul><li>Improved bandwidth, encryption and coverage over WiFi </li></ul></ul><ul><ul><ul><li>Theoretical peak data rates of 70Mbps (practical peak ~2Mbps) </li></ul></ul></ul><ul><ul><li>Improved QoS better enables applications such as VoIP or IPTV </li></ul></ul><ul><ul><li>Ideal application is for “last mile” connectivity to the home or business </li></ul></ul><ul><ul><li>Intel plans to embed WiMAX chips as part of ‘Intel Inside’ </li></ul></ul><ul><li>L3GTE/HSOPA </li></ul><ul><ul><li>Early standardization work starts in 3GPP R8 </li></ul></ul><ul><ul><li>Improved bandwidth, latency over UMTS/HSxPA </li></ul></ul><ul><ul><li>Radio technology based on MIMO-OFDM, peak data rates of up to 70Mbps </li></ul></ul><ul><ul><li>Network simplification </li></ul></ul>
  15. 15. Wireless Access Evolution 3G <ul><li>Broadband </li></ul><ul><li>New Services </li></ul><ul><li>Efficiency </li></ul>Broadband Subscribers Voice <ul><li>Coverage </li></ul><ul><li>Mobility </li></ul>1G <ul><li>Voice Quality </li></ul><ul><li>Portability </li></ul><ul><li>Capacity </li></ul>2G 4G <ul><li>Broadband </li></ul><ul><li>Network Simplification </li></ul><ul><li>Cost of Ownership </li></ul>
  16. 16. Agenda <ul><li>Wireless Cellular Technology Overview </li></ul><ul><ul><li>2G, 3G and Beyond </li></ul></ul><ul><li>Market Segmentation </li></ul><ul><ul><li>Network Convergence </li></ul></ul><ul><li>Market Trends </li></ul><ul><ul><li>Services </li></ul></ul>
  17. 17. Market Segments Cordless WiMAX 16e HSDPA to OFDM EV-DO to OFDM WiFi Local Fixed Voice Broadband Cellular WiMAX 16d DSL / Cable POTS 802.11a/b/g 802.11n MIMO Mesh Dialup 2.5G Mobile
  18. 18. Operator Objectives Voice+ Growth to Wireless Data+ Growth to Broadband Network Goals are Similar Differentiation on Access & Business goals <ul><li>Mobile Operators </li></ul><ul><ul><li>Subscriber growth </li></ul></ul><ul><ul><li>Wireless Data / 3G </li></ul></ul><ul><ul><li>Wireline Substitution </li></ul></ul><ul><li>Fixed Operators </li></ul><ul><ul><li>Broadband Line Growth </li></ul></ul><ul><ul><li>Revenue Protection </li></ul></ul><ul><li>Cable, Satellite, ISP </li></ul><ul><ul><li>Network Leverage </li></ul></ul><ul><ul><li>New Market Penetration </li></ul></ul><ul><ul><li>Video Triple Play </li></ul></ul>Drivers Wireless Broadband Core IP Customer Lifestyle Search for Growth
  19. 19. Network Convergence Fixed Mobile Reliable, Scalable, Secure Internet PSTN CSCF MGW MGW IP & Optical HLR HSS CS MGCF IP SGSN PDSN WLAN GGSN HA PDG Gateway Access Services Gateway IP DSLAM BRAS PDG WIMAX WLAN Gateway Access Services Gateway
  20. 20. Network Convergence - IMS Service Control Presence / GLMS Applications R4 CDMA PSTN Media Resources TDM & Packet Interworking Peer IP Network Access Network IP/MPLS Core Multimedia Services Messaging Services Web / WAP Services Streaming Services Audio/ Video WLAN ASN WiMAX GPRS UMTS ASG HSOPA OFDM/MIMO BRAS PDF HSS/AAA MG15000 MGCF (CS2000) Call Session Controller MRF PDG ASN CSN GGSN EASGW PDG GGSN ASN CSN ASGW
  21. 21. Network Enablers <ul><li>Charging </li></ul><ul><ul><li>Ability to provide differentiated charging based flexible usage models, including time / data / volume </li></ul></ul><ul><li>Quality of Service </li></ul><ul><ul><li>Ability to provide differentiated service, e.g. Olympic levels: gold / silver / bronze </li></ul></ul><ul><li>Policy Management </li></ul><ul><ul><li>Ability to make personalized policy decisions based on subscriber, access and content </li></ul></ul><ul><li>Security </li></ul><ul><ul><li>Ability to provide secure access and “clean pipes” for content delivery </li></ul></ul>
  22. 22. Agenda <ul><li>Wireless Cellular Technology Overview </li></ul><ul><ul><li>2G, 3G and Beyond </li></ul></ul><ul><li>Market Segmentation </li></ul><ul><ul><li>Network Convergence </li></ul></ul><ul><li>Market Trends </li></ul><ul><ul><li>Services </li></ul></ul>
  23. 23. Market Trends <ul><li>Media Convergence – Multiple Play </li></ul><ul><ul><li>Dual Play: High-Speed Internet & Fixed Line </li></ul></ul><ul><ul><li>Triple Play: Dual Play + TV </li></ul></ul><ul><ul><li>Quadruple Play: Triple Play + Wireless </li></ul></ul><ul><ul><li>Challenge: Consolidated Invoice and Price Points </li></ul></ul><ul><li>Fixed Mobile Convergence </li></ul><ul><ul><li>Dual Mode connectivity </li></ul></ul><ul><ul><ul><li>Cellular / Cordless (DECT, ADSL/Bluetooth) </li></ul></ul></ul><ul><ul><ul><li>WLAN / WWAN </li></ul></ul></ul><ul><ul><li>Challenge: Technology standardization </li></ul></ul><ul><li>MVNO – Mobile Virtual Network Operator </li></ul><ul><ul><li>Wireless Service Reseller, wholesales access from wireless operators </li></ul></ul><ul><ul><li>Discount & Lifestyle MVNO’s </li></ul></ul><ul><ul><li>Segment, Product, Utilization Driven </li></ul></ul><ul><ul><li>Challenge: Market Saturation & Service Differentiation </li></ul></ul>
  24. 24. Market Trends (continued) <ul><li>M-Commerce – Electronic Commerce using Mobile Phones </li></ul><ul><ul><li>Leverage ubiquity of mobile phones to make transactions </li></ul></ul><ul><ul><li>Current payment methods: premium calling #’s, phone bill invoice, credit card </li></ul></ul><ul><ul><li>Strong interest in key industries: banking, sports & entertainment, travel, retail </li></ul></ul><ul><ul><li>Challenge: Security, Terminal Capabilities, Access Speeds </li></ul></ul><ul><li>Multimedia – use of several media types to convey information </li></ul><ul><ul><li>Effective information delivery across many disciplines: art, education, telecommunications, medicine </li></ul></ul><ul><ul><li>IMS enables multimedia services for mobile users </li></ul></ul><ul><ul><ul><li>VoIP </li></ul></ul></ul><ul><ul><li>Challenge: User Interface, Form Factor, lack of “killer app” </li></ul></ul><ul><li>Presence – Always on, always connected </li></ul><ul><ul><li>Combine Mobility & Reachability </li></ul></ul><ul><ul><li>Effectively bring Popularity of IM to mobile phones (AOL, Yahoo!, MSN, Skype) </li></ul></ul><ul><ul><li>Opportunity for standardization & interworking based on SIP/SIMPLE </li></ul></ul><ul><ul><li>Challenge: Standardization & always on connectivity </li></ul></ul>
  25. 25. Market Trends The next 5 years in North America <ul><li>More substitution of mobile and wireless technologies for fixed lines </li></ul><ul><ul><li>30% US homes will have only cellular or broadband access, driven by youth who see no value in fixed lines for telephony </li></ul></ul><ul><li>Lower churn </li></ul><ul><ul><li>Due to consolidation, better pricing and marketing plans, higher quality networks </li></ul></ul><ul><li>More mobile e-mail </li></ul><ul><ul><li>Driven by popularity, proliferation of smartphones, and ease of setup and use </li></ul></ul><ul><li>Greater adoption of smartphones </li></ul><ul><ul><li>Defined as phones that run open OS’s, e.g. Microsoft, driven by business users, </li></ul></ul><ul><li>Increased mobile advertising </li></ul><ul><ul><li>Mobile advertising needed for added revenue generation; successful use will require balancing intrusive nature of unsolicited ads & value to the end user </li></ul></ul>
  26. 26. Market Trends The next 5 years in North America <ul><li>The growth of mobile entertainment </li></ul><ul><ul><li>Handsets are increasing designed for entertainment with integrated cameras, MP3 players – trend will be to partner with content providers to drive usage (Google, Yahoo!, Apple) </li></ul></ul><ul><li>Greater market penetration by mobile technologies and slower connection growth </li></ul><ul><ul><li>North America will become increasingly saturated – will drive price competition, flexible and targeted tariff plans, and differentiation </li></ul></ul><ul><li>More converged services based on the IP Multimedia Subsystem (IMS) </li></ul><ul><ul><li>Will become common network infrastructure, will enable fixed and mobile service bundles </li></ul></ul><ul><li>The rise of mobile virtual network operators (MVNOs) </li></ul><ul><ul><li>Will add value by offering differentiation </li></ul></ul><ul><li>More mobile data applications for enterprises </li></ul><ul><ul><li>Increased email, as well as presence and location functions, will drive up data usage </li></ul></ul>
  27. 27. Services <ul><li>Prepaid </li></ul><ul><ul><li>Segment driven, will increase with MVNO’s </li></ul></ul><ul><li>SMS </li></ul><ul><ul><li>Remains extremely popular, key driver is use of short-code numbers </li></ul></ul><ul><li>Push-To-Talk </li></ul><ul><ul><li>Segment driven, slow take amongst general consumers </li></ul></ul><ul><li>MMS </li></ul><ul><ul><li>Slow adoption due to user interface, will increase due to interoperability improvements and integration with m-commerce </li></ul></ul><ul><li>Downloads </li></ul><ul><ul><li>Ring-tones is #1 revenue generator but slowing, Gaming is on the rise </li></ul></ul><ul><li>Video </li></ul><ul><ul><li>Video clip services are emerging, pricing is typically subscription-based </li></ul></ul><ul><li>Music </li></ul><ul><ul><li>Music stores increasingly common, need competitive pricing, will leverage MP3 integration </li></ul></ul><ul><li>Radio </li></ul><ul><ul><li>Satellite radio offers resell XM and Sirius </li></ul></ul><ul><li>Adult </li></ul><ul><ul><li>CTIA recommendation for socially responsible access to content; penetration expected to start in 2008 </li></ul></ul>